This page has been archived and commenting is disabled.

Market Snapshot - What Happened?

Tyler Durden's picture




 

A perfectly timed rumor that not only was unprovable but has potential merit (though has no ability to successfully 'fix' any of the issues that are rightfully staggering global equity and credit markets), was enough, combined with some awesomely-ironic VWAP reversion volumes to take the offer stack in S&P futures and squeeze weaker shorts enabling a miraculous run to the green finish line in ES today.

Having tested the 1130 level a few times overnight, S&P futures were increasingly anxious every time they reached down to this somewhat critical level and as we broke it for the third time during the day session, sure enough the China/Italy rumor hit as we pointed out earlier. Also, as we noted at the time, the half life of this jump was less than 30 minutes and just as we had fully retraced, the FT posted the story in full technicolor which realistically had absolutely nothing in it at all aside from the fact that a regular purchaser of sovereign bonds globally was meeting withe Italian officials last week (quelle surprise - sorry never learned Italian).

That was enough to take ES on a 4-5 Standard Deviation ramp-fest across VWAP and into the green for a wonderful evening of headlines about how we are all saved (just like the Port of Piraeus!!).

This move in ES was not totally unsupported as the EUR pulled back to its best levels of the day - dragging DXY just very modestly into the red for the day. Its worth noting that SEK was a major underperformer today relative to the US (down over 3.5% at one point before the late day ramp). Carry pairs were aided by the relative JPY selling as the day wore on and oil and copper rallied (the latter remained just red on the day as the former managed an almost 2% gain on the day). Silver and Gold seemed to suffer from liquidation early on but recovered some of the day's losses as the dollar rolled lower in the afternoon.

TSYs sold off as ES rallied but yields dropped in the last few minutes of the day even as ES powered into oblivion. notably 5Y underperformed +6bps from Friday followed by 2Y +3.6bps, 10Y +3bps, and 30Y +0.5bps.

Credit did behave 'differently' though - as is often the case and we note a few interesting tidbits: 1) there was net-selling in HY cash markets today - something we haven't seen in a while, 2) while HY did rally back into the close it remained 5-10bps wider on the day in 5Y but was very ugly in the less liquid 3Y (last we saw was 30-40bps wider!!), 3) IG rallied back also with ES but underperformed notably and ended the day 3-4bps wider of Friday's close, 4) IG9 (which matures Dec2012) was very ugly also - decompressing notably as those nasty tail names remain under pressure from the heavy-handed high gamma crowd in the tranche space, 5) HYG/JNK did not have as much fun into the close as stocks did (something we have seen again and again and tends to be a signal that equity was a little over its skis).

Charts: Bloomberg

Drilling down a little into equity and credit - we note XLF managed to gain 1.3% today but credit spreads were all wider: Citi +15 to 262bps, MS +14 to 350bps, BAC +8 to 370bps, GS +9 to 264bps. Builders were hit particularly hard after Fitch's downgrades of the entire housing market outlook and Insurers did not come back off their wides that much as the equity rally ensued. Interestingly in CMBX land - we saw (yet again) the long correlation trade (betting on increasing systemic risk) as seniors underperformed juniors and we also note (in with builders stress), ABX tranches were weaker pretty much across the board.

 

On a broad-based risk-asset basis, ES was supported up to around 1150-53 but ES accelerated notably expensive from there. After the day session close, the risk-basket is leaking lower as ES pushes incrementally higher. Add to this the fact that VIX closed up on the day as did Implied Correlation (though both well off their intraday highs) and that as we rallied the last 5-10pts in ES, we saw average trade size rising notably, we suspect professionals were selling into strength once again - though these squeezes always seem to move more than many believe recently.

From a cross-asset class perspective, those with a bullish bias would be better positioned adding to HY longs here, and those with a bearish bias should prefer to use equities. In relative-value land, a HY-IG compression - modestly hedged with an equity short should perform well if we remain range-bound.

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Mon, 09/12/2011 - 17:54 | 1661537 max2205
max2205's picture

TD can you post the return of just going long the last 30 min? I think it's about 200% in the last 4 weeks

Mon, 09/12/2011 - 18:02 | 1661566 The Peak Oil Poet
The Peak Oil Poet's picture

 

Greek short term Bonds were trading at over 100% yield

 

meaning that "everybody" expected default

while that was happening every man and his dog has been secretly buying Greek short term bonds dirt cheap (ie the big funds dump them while their managers buy them)

that's why gold has been dropping lately

so oh gee sudenly there's a rescue (again)

and everyone cashes in and then ploughs it back into - gold

 

pop

 

Mon, 09/12/2011 - 18:20 | 1661620 Snidley Whipsnae
Snidley Whipsnae's picture

"There are no markets, just interventions."

Chris Powell, GATA

"The pampered princes on Bloomberg today suggested there was selling of gold to 'raise capital' today, and that selling was being done by 'central banks.' Perhaps they need to meet some margin calls. lol.

You just can't make this stuff up."   Jesse

http://jessescrossroadscafe.blogspot.com/ 

Mon, 09/12/2011 - 18:33 | 1661653 TwelfthVulture
TwelfthVulture's picture

It wasn't just Bloomberg.  I saw this all morning.  All over the web, headline after headline, implying that gold was down due to selling to cover equities.  I mean, who the hell sells a profitable position to back up a losing position?  When AAPL goes down, does anyone suggest that investors are selling Apple to protect their Sino-Forest positions?

Mon, 09/12/2011 - 18:44 | 1661688 Snidley Whipsnae
Snidley Whipsnae's picture

MSM is programmed to talk down PMs, and that is what they are doing...

But, nothing has changed. The fundamentals that were in place are still in place and are worsening day by day.

The central banks and soverign govs are continuing to play for one more day in the sun.

No one in power wants this slow motion train wreck to culminate on their watch... If it did the body count would begin and that number will be awsome...Many, many wealthy bond holders and equities holders and all associated institutions will be wiped out. So they kick the can again and print, print, print.

I believe that central banks are so desperate that they are now resorting to selling gold which they have accumulated over the past few years... in an attempt to keep gold from reaching $2K per oz. This is an 'all in' play for central banks for when their fiat scheme fails these central bankers, their institutions, their jobs, their reputations, all go away. They are desperate and fighting for their lives... With our soverign gold.

Mon, 09/12/2011 - 19:16 | 1661761 ManufacturedOpinion
ManufacturedOpinion's picture

Isn't this options expiry week for stocks?

They're probably just "pegging the number" for Friday on the ETF's.

Mon, 09/12/2011 - 20:36 | 1661949 DeadFred
DeadFred's picture

In poker this would be a good time to call the bluff. Short term the only thing that will save this market is the 'for real' Chinese. Long term even they can't save it. When there are too many shorts you can expect the bankster to act like banksters. I think this turns by the end of the week. Watch for the news to change toward 'Maybe we have bottomed and this is the real recovery rally, blah blah blah' then the rug gets pulled out.

Mon, 09/12/2011 - 18:51 | 1661702 Everybodys All ...
Everybodys All American's picture

John Paulson has been mentioned.

 

Mon, 09/12/2011 - 19:10 | 1661744 Manthong
Manthong's picture

This might make for an interesting thread..  It might be instructive to review side by side charts of the SPX and the DJI from today..

I'm looking at them and I have a hard time believing I am not seeing double...  the (relative) high and low ticks at 15 minutes and volumes are almost PRECISELY identical - to the minute - for the entire day.

Is there some technical reason for this?

I've seen the stepped pump in the last hour a number of times, but both indexes precisely in alignment??? 

I can think of one fundamental reason in particular, but I can't believe it could be so obvious.. or careless.  

Mon, 09/12/2011 - 19:24 | 1661777 TwelfthVulture
TwelfthVulture's picture

It's like that most days these days.  The NASDAQ also, but you sometimes have to adjust the y-axis.  (apologies, misread your post.  i'm talking general, i did not notice the exact movement you mentioned.)

What I find particularly "deja vu"-ish is that, ignoring the end of day melt-up, for the past week or so gold and silver moved down in tandem with the indices.  I have not seen that since the 2008 sell-off.

Mon, 09/12/2011 - 20:17 | 1661866 Manthong
Manthong's picture

Maybe I am doing something wrong? 

The charts are scaled appropriately I think.

At each 15 minute mark, the direction and proportion of the movement looks the same.

The melt up is the same as a week ago Friday, only over 45 minutes rather than 30.

 

Mon, 09/12/2011 - 20:24 | 1661903 TwelfthVulture
TwelfthVulture's picture

Oh, yeah.  You're seeing what you think you're seeing.  And you're right, it's getting tighter and tighter.  The next thing I expect to see (and it seems to be beginning) is everything moving together, equities, bonds, pm's.  All up or all down.  The only thing I haven't seen yet that I saw before the 2008 crash is Treasury yields AND prices moving in the same direction.  I remember watching it happen several times in the lead up to Lehman.  To this day, it's like an alien abduction or something, I can't really believe that I saw what I saw.

Mon, 09/12/2011 - 21:03 | 1662040 Ned Zeppelin
Ned Zeppelin's picture

If the traders were human, it owuld be suspicious, but since they are only computer programs, be surprised at nothing. 

Mon, 09/12/2011 - 18:35 | 1661657 Chaffinch
Chaffinch's picture

Jim Wyckoff at Kitco normally explains drops as 'profit taking' (to cover losses on equities or margin calls). Always a mystery to me why the 'profit takers' just keep on hammering away trying to drive down through key support levels...

Mon, 09/12/2011 - 19:34 | 1661799 TwelfthVulture
TwelfthVulture's picture

I know what you're saying it just makes no sense.  If I'm long AAPL and Sino-Forest, I sure as shit am not going to sell my AAPL so I can hold onto Sino-Forest.  And you don't get margin calls on a single position, you get them on the portfolio, so again, if Sino-Forest is dropping so fast that it is generating a margin call on an AAPL, Sino portfolio, I'm dumping the Sino-forest long before that happens.

Mon, 09/12/2011 - 20:41 | 1661961 DeadFred
DeadFred's picture

You, thankfully, are not a robot or bankster working for the dark side of the force. That explains most of the difference.

Tue, 09/13/2011 - 05:28 | 1662843 Chaffinch
Chaffinch's picture

Ah but we're dealing with bears here. Bears won't dump on their Apples because they can eat their Apples; given the choice a Bear will shit in the Sino Forest part of his portfolio.

Mon, 09/12/2011 - 18:06 | 1661578 Smiddywesson
Smiddywesson's picture

perfectly normal price action I can assure you.

Mon, 09/12/2011 - 18:12 | 1661591 Soul Train
Soul Train's picture

yep, a lot of short covering these past few weeks in the last 30 min.

Today, it was panic covering to take profits.

Mon, 09/12/2011 - 20:24 | 1661901 scatterbrains
scatterbrains's picture

I like to think this whole flag formation is weak shorts getting worked off. The event that triggers the big move will occur overseas obviously. Our equity tape here in the states will snap and those lone shorts that held in will get paid. I expect most peeps to be shaken out of their shorts, caught with their thumbs up their ass when it happens.

 

Mon, 09/12/2011 - 18:18 | 1661611 supersunken
supersunken's picture

Didn't the same movement happen last Tue when rule 48 was in effect, Dow was down for most of the morning then came back...next day market jumped even higher. 

Mon, 09/12/2011 - 17:55 | 1661539 buzzsaw99
buzzsaw99's picture

with each passing day the wolf has fewer sheep to chase around.

Mon, 09/12/2011 - 18:06 | 1661577 dwdollar
dwdollar's picture

With each passing day a boomer dies and the kids withdraw their inheritance in order to survive.  The clock is ticking...

Mon, 09/12/2011 - 18:22 | 1661631 Tinsu
Tinsu's picture

You can't imagine how true that is. 

Mon, 09/12/2011 - 18:29 | 1661646 Rainman
Rainman's picture

Inheritance....what the hell is that ?? Blow it all bitchez !

Mon, 09/12/2011 - 19:15 | 1661755 Dave
Dave's picture

Told my son that very thing. You're on your own boy. Me and yo momma are going sailing.

Mon, 09/12/2011 - 19:28 | 1661790 BDig
BDig's picture

I was given the same lesson implicitly by my parents.  And I agreed until I had children of my own.

To me, money is a tool to buy, not items, but freedom.  Money is the ticket out of serfdom/slavery whatever you want to call it.  It's what enables some people to be an artist and not worry about starving.  Or be a philosopher and need not worry about publishing.  I hope to buy not only my own way out, but also my kids.  That's a big bill though depending on the quality of life you want to enjoy and the price of a slave 20 years from now.

Mon, 09/12/2011 - 20:30 | 1661927 Bicycle Repairman
Bicycle Repairman's picture

Here, here.  If you had kids just to turn them into slaves, you are not my countryman.  Be gone.

Mon, 09/12/2011 - 21:31 | 1662136 fasTTcar
fasTTcar's picture

The goal is to live life big enough that the cheque to the undertaker bounces.

Mon, 09/12/2011 - 23:41 | 1662496 Hulk
Hulk's picture

So true...

Mon, 09/12/2011 - 21:04 | 1662047 Ned Zeppelin
Ned Zeppelin's picture

Seems like once Europa closes the US PPT gloves come off, that is for sure. 

Mon, 09/12/2011 - 17:55 | 1661541 Xibalba
Xibalba's picture

ponzi chit

Mon, 09/12/2011 - 17:55 | 1661543 treemagnet
treemagnet's picture

Unicorns can't shit skittles everyday much less on command.  Tomorrow's still coming.

Mon, 09/12/2011 - 17:58 | 1661544 Theta_Burn
Theta_Burn's picture

What just happened to all the major currencies?

 

http://finviz.com/futures_charts.ashx?t=ALL&p=m5

Mon, 09/12/2011 - 17:59 | 1661556 max2205
max2205's picture

Finviz burbs this time of day

Mon, 09/12/2011 - 21:03 | 1662041 Hephasteus
Hephasteus's picture

Gold is higher than platinum. That is crazy.

Tue, 09/13/2011 - 05:36 | 1662850 Chaffinch
Chaffinch's picture

Gold has been higher than platinum before; trouble is, the price of Gold has been held down for a very long time. Gold is starting to come up towards it's real value. Platinum is very useful stuff, no doubt about it, but it can't compete with Gold's function as a currency - and the world needs a currency it can rely on like never before in history.

Mon, 09/12/2011 - 17:58 | 1661551 Flakmeister
Flakmeister's picture

Todays action might have the been worst of the past 6 months....

Mon, 09/12/2011 - 17:58 | 1661552 dasein211
dasein211's picture

Like i said earlier today. Too scared to challenge the QE train/ cb intervention and too scared to go all in becase of debt/defaults. DEER. IN. THE. HEADLIGHTS.

Mon, 09/12/2011 - 17:59 | 1661555 LookingWithAmazement
LookingWithAmazement's picture

Bye bye eurocrisis. Even Germany and France can easily bailout their banks. All the doomers can go asleep again, after selling their gold and silver, which are now plunging. Ok, let the next boom(-bust) cycle begin. War is over, merry Christmas everyone.

Mon, 09/12/2011 - 18:02 | 1661567 TruthInSunshine
TruthInSunshine's picture

The mere fact, alone, that you put Germany & France in the same category regarding the ability to "bail out their banks" is prima facie evidence of your idiocy.

Mon, 09/12/2011 - 18:21 | 1661626 LookingWithAmazement
LookingWithAmazement's picture

France has 14 billion to pay when its banks write off Greece bonds. That's all. Sleep well.

Mon, 09/12/2011 - 18:31 | 1661648 BetTheHouse
BetTheHouse's picture

Well. I would, but your sister ... Jesus!  She won't leave me alone!  Now .. what were saying about the banks?

Mon, 09/12/2011 - 18:49 | 1661698 Snidley Whipsnae
Snidley Whipsnae's picture

"France has 14 billion to pay when its banks write off Greece bonds."

Don't make me laugh... For $14Billion Germany and now England would not be attempting to ring fence their banking sectors.

Mon, 09/12/2011 - 19:12 | 1661739 TwelfthVulture
TwelfthVulture's picture

Dude, you forget to mention all the counterparty CDS's that French banks have against Greek banks who will be subsequently wiped out by a Greek default?  What about all the GREEK bonds held by French banks that will be wiped out by a subsequent Greek default?  What about all the Greek MORTGAGES held by French banks that will be wiped out by a subsequent Greek default?  What about all the counterparty CDS's that French banks have against GERMAN banks who have counterparty CDS's against Greek banks who will be wiped out by a subsequent Greek default?  What about all the counterparty CDS's that French banks have against Italian banks that will be wiped out by a Greek default which will itself neccesitate an ITALIAN default?  Do you see where this is going?

 

Mon, 09/12/2011 - 21:20 | 1662097 Threeggg
Threeggg's picture

He doesn't count this "stuff"

Ignorance is Bliss you know !

Mon, 09/12/2011 - 20:32 | 1661933 Bicycle Repairman
Bicycle Repairman's picture

Portugal? Italy? France?

Mon, 09/12/2011 - 18:36 | 1661660 Smiddywesson
Smiddywesson's picture

Oh, I wouldn't be so hasty to denounce someone for idiocy when idiocy rules the day.  

I don't usually post my trades, but I posted that I was going to cash on Friday because TPTB are cornered, and being the vicious little vermin that they are, they are going to use every dirty trick in their posession to keep gold below $2000.  That trade worked out, because gold had every reason to rise, and yet I went to cash just before it dropped.  Probably a coincidence (wink).  

I have a lot of money in an IRA, and a lot in physical, but I have done a lot of soul searching and believe that FOFOA is right, the decoupling of paper gold and physical gold will necessitate a drop in paper gold prices prior to a real valuation of gold.  This is a watershed event for me, because I always thought gold would rise based on the fundamentals  (despite overpowering manipulation)  but gold prices are not related to fundamentals, gold prices are PAPER prices, minus minus manipulation, and then they are affected by the fundamentals.  What I missed in my analysis is that there is a price to pay for all of this manipulation, and even though Eric Sprott and others with physical funds emphasize the physical backing of the funds, when the cascading collapse of the decoupling occurs, will these funds stop trading or follow the paper price down?  ZH readers, help me here, do any of these funds have a decoupling provision??????????????????  

The only safety is physical.  I am withdrawing all my 401K funds and buying physical.  In this market, even if you are right, you will still be wrong if you don't hold physical.  Appologies to Eric Sprott if anybody thinks that is a criticism of him, it's not, he's the real deal. 

Mon, 09/12/2011 - 20:03 | 1661825 Chaffinch
Chaffinch's picture

I have read some of Another's thoughts, and some of what FOFOA says about Freegold / price decoupling and I am trying to understand how it will happen. The only historical example I know of is when the US Govt revalued (physical) gold overnight from 20.67 (those were the days huh?) to 35.00. A 70% hike. But FOFOA is talking about as much as a 100 fold increase. If the principal of an overnight revaluation works then I guess the level of increase could be anything appropriate. So I guess paper gold in this example would have been left at 20.67, for the purposes of working out who owes who how much (in fiat currency). But these days I imagine the de-coupling would work differently, and lawyers would be heavily involved. TPTB could close all the paper and physical markets for as long as it takes to sort out the huge mess. All the holders of paper gold would have counter parties (and some would have long chains of inter-linked counter-parties) and GLD holders would probably sue via a class action. I am guessing a senior judge somewhere would set a value of $x for the value of paper gold at the point where the markets closed. I reckon (a) by the time he makes his decision the value of physical could have risen a whole lot more (and/or the value of the fiat dollar would have become worth even less) and (b) he will discount the value of paper gold versus physical because it will have been demonstrated to him by lawyers acting for the counter-parties that the investors who bought paper gold had the option of investing in physical but chose paper because they wanted leverage, or to avoid storage fees etc, so only right that they should be worse off than holders of physical. But I don't think he could discount hugely - maybe if physical had shot to 10k then he could value paper gold at 8k - but these are wild guesses. However we don't know who the counter-parties might be (especially where there is a long chain of counterparties) and some of them might be unable to pay in which case there would be defaults, possibly without any viable legal remedy, and even if there was a legal remedy it could take years to get it sorted out. The lawyers would make a fortune, so would all the 'expert witnesses' from the LBMA, Comex etc. And if what we read is correct, there might be 100 people with competing claims over the same physical, in which case what is a judge to do, except listen to all of the claimants and then either choose the one in a hundred with the best claim (the one who has the oldest claim on it perhaps?), or split the physical into 100 portions and divvy it out.

Mon, 09/12/2011 - 21:06 | 1662057 Ned Zeppelin
Ned Zeppelin's picture

I think in the US it is OK to be in cash (for now - BTFD in PMs) and gold. the rest is nonsense. 

Mon, 09/12/2011 - 18:03 | 1661569 eureka
eureka's picture

Yep - except: NEXT STOP: US.

QUIZZ:  What backs the USD? (if you don't know - look below) 

300 MILLION US TAX SLAVES.

 

Mon, 09/12/2011 - 18:20 | 1661622 LookingWithAmazement
LookingWithAmazement's picture

Slaves or folks that are having themselves slaved? Why is there no Facebook-revolution in the United Sheeples of America? It appears you are content enough with your country and the politics. Moreover, Obama will be re-elected in 2012; nuff' said, willing slaves.

Mon, 09/12/2011 - 19:28 | 1661789 Dave
Dave's picture

You are correct. The public school "education" of the past 2 generations has had it's intended effect. It's working perfectly and Obama probably will get re-elected but it doesn't matter if he's replaced. Politically, nothing will change.

Mon, 09/12/2011 - 20:49 | 1661991 WonderDawg
WonderDawg's picture

I'd be willing to bet all my physical PMs that Obama will NOT be re-elected.

Mon, 09/12/2011 - 18:21 | 1661625 TwelfthVulture
TwelfthVulture's picture

What do you think this mess has been about all these months?    Do you really not comprehend that the "Greek" bailout is really about bailing out/backstopping the German and French and English and US banks?  Do you come to Zerohedge and read the articles and read the posts and post your posts and still not understand that the "Greek" bailout has precious little to do with bailing out Greece or the Greeks?  If Germany could afford to bail out German banks, and France could afford to bailout French banks, and England could afford to bailout English banks, and the US could afford to bailout US banks, well then, we could have avoided all this like the plague and let Iceland, Greece, Portugal, Ireland, Italy and Spain default MONTHS ago and let the German, French, English and US authorities do what they can "easily" do and bail out their own bankers.

Mon, 09/12/2011 - 18:22 | 1661632 LookingWithAmazement
LookingWithAmazement's picture

For months they tried, now they've found that it does not work and Plan B comes in: default and bailout banks directly.

Mon, 09/12/2011 - 18:41 | 1661679 Citxmech
Citxmech's picture

Let me get this straight:  For "months" the Germans and French have tried to bailout thier own banks - but that didn't work - so now they  are "easily" bailing out Greece, thereby succeeding in saving themselves?  wtf are you talking about?

Put the crackpipe down, son.

Mon, 09/12/2011 - 20:19 | 1661890 treemagnet
treemagnet's picture

Wheres JW in FL, Trav7777, slewie the pie rat when you need 'em?  They'll crawl up your ass and make a nest, so just keep talking dumbass.  You will however, be required to answer questions instead of just sniping your cowardly ass along.....up for it?

Mon, 09/12/2011 - 20:05 | 1661671 Chaffinch
Chaffinch's picture

Silver has recovered 2.5% from 3975 to 4075 so far. Gold bouncing back nicely too. To quote someone else on ZH the half life of these knife attacks is getting shorter and shorter as the global currency crisis nears its climax.

Mon, 09/12/2011 - 18:00 | 1661558 Sancho Panza
Sancho Panza's picture

If all it takes to send an overbought market higher is a central bank money-printing rumor, then what will happen when someone spreads the word the Rothschilds have decided to call?

Mon, 09/12/2011 - 18:01 | 1661562 Long-John-Silver
Long-John-Silver's picture

Broken Market Bitchez.

Mon, 09/12/2011 - 18:06 | 1661576 GiantWang
GiantWang's picture

From the last ZH post:

"The governments and central bankers may still win but it will all come down to the luck of the draw since the odds are stacked against them."

What exactly does it mean if the central bankers win, and since they've never lost, why would anyone conclude the deck is stacked against them?  They make new playing cards and change the rules as they go along--the create our economic reality.

Has anyone stopped to think about whether an economy functions under natural law rather than manmade rules?  Lots of commenters make reference to laws of physics, but do they apply to economics, or can the bankers win over and over again?  Can they erect a new bank-controlled phoenix from every pile of ashes, which in turn allows for easy money (high returns on capital) at first, with ever diminishing margins until another crash occurs?

If you ask me, the system, the bankers, the fiat is not going anywhere.  Things seem to keep getting worse, yet the majority of "smart money," whether sophisticated hedge funds or credit traders are still dealing in fiat (even if they own gold through GLD).

Mon, 09/12/2011 - 18:15 | 1661603 iNull
iNull's picture

"Has anyone stopped to think about whether an economy functions under natural law rather than manmade rules?"

Yes. Many people have thought about this. The nascent science is called socionomics and is based on Fibonacci numbers and the "golden rectangle" or Phi.

Mon, 09/12/2011 - 18:24 | 1661636 fuu
fuu's picture

I swear there was a movie about that.

Mon, 09/12/2011 - 18:30 | 1661644 iNull
iNull's picture

Two that I know of. One is an Australian movie called The Bank. The other is an indie film called Pi. Both deal with Phi and being able to program powerful computers to predict the stock market. 

Mon, 09/12/2011 - 18:58 | 1661720 TwelfthVulture
TwelfthVulture's picture

Yeah, you should also see "When Genius Failed," and "Smartest Guys in the Room," for how it ends.

Mon, 09/12/2011 - 19:48 | 1661833 iNull
iNull's picture

Haven't seen the first one but I watched SGITR twice. Excellent.

Mon, 09/12/2011 - 18:58 | 1661721 caerus
caerus's picture

+1.61803399

Mon, 09/12/2011 - 20:58 | 1662024 WonderDawg
WonderDawg's picture

Socionomics is cool stuff. It explains a lot about what is happening now, not just in the markets but in society in general. It also helps explain why history seems to rhyme.

Also, it's pretty cool background knowledge to have when reading The Fourth Turning. Socionomics supports generational dynamics from a different angle. Understanding Socionomics and studying history from the generational standpoint has given me a different lens with which to view the world. The intellectual exercise is stimulating.

There, I'm done sounding like a nerd.

 Bitchez.

Mon, 09/12/2011 - 21:01 | 1662032 WonderDawg
WonderDawg's picture

Okay, one more thing. Socionomics also compliments von Mises theory. Human Action explains the nature of the trees, and Socionomics explains the nature of the forest.

Now I'm done.

Bitchez.

 

Mon, 09/12/2011 - 18:19 | 1661618 Soul Train
Soul Train's picture

at the end of the day, it's about ROI -profits -dividends.

This is true whether fiat or PM backed currencies.

All these SMA computer screens and trending is simply the greater fool theory.

And a fool and his money soon go separate ways. The trading houses and hedge funds use their muscle and massive capital, together with deceit to wrestle the money away from little boy day traders, and over the longer term all the 401k industrial savers who crave to keep up with the S&P.

 

Mon, 09/12/2011 - 18:06 | 1661579 ffart
ffart's picture

Looks like the Market is mainlining heroin again. Who knows by the end of this week maybe it will be eating pieces of its own face or beating someone's dog to death.

Mon, 09/12/2011 - 18:07 | 1661580 Racer
Racer's picture

What happened?

 

ChairSatan is scared sh1tless and that is the only bullet he has left

Mon, 09/12/2011 - 18:12 | 1661585 iNull
iNull's picture

I can't remember a single time when looking at a daily stock chart has made me laugh. We don't have a stock maarket. This is a sardonic burlesque act.

Mon, 09/12/2011 - 18:10 | 1661586 lemonobrien
lemonobrien's picture

gov bitches.

Mon, 09/12/2011 - 18:19 | 1661614 iNull
iNull's picture

No doubt. But the truth is that the government is not large enough to "control" the market. It can temporarily inflect the market, like we saw in the closing 30 minutes, but the market is too vast for any single person or agency to control. Not even the govt has the resources to do that. Witness what has happened since July. All ponzi schemes collapse. All of them, and this will not be the exception. 

Mon, 09/12/2011 - 18:11 | 1661590 HUGE_Gamma
HUGE_Gamma's picture

the same people really behind 911

Mon, 09/12/2011 - 18:13 | 1661593 Bansters-in-my-...
Bansters-in-my- feces's picture

dA FUCKING pONZI CONTINUES.

Mon, 09/12/2011 - 18:14 | 1661595 Belarus
Belarus's picture

"Tools," bitchez.

Mon, 09/12/2011 - 18:13 | 1661594 Belarus
Belarus's picture

i'm just glad I don't have to explain what happened in the market today because my article would start and end only one way.

WTF. WTF.

Mon, 09/12/2011 - 18:14 | 1661598 Placerville
Placerville's picture

Also, the return of going LONG in the last hour?

Mon, 09/12/2011 - 18:14 | 1661600 Yogibear101
Yogibear101's picture

The slow move is the trend, the fast move is the correction.

Mon, 09/12/2011 - 18:15 | 1661602 dcb
dcb's picture

funny how painting the tape is illegal, just not when the big boys do it. Sometimes, ZH has the data on who did all the buying, any guess.

Mon, 09/12/2011 - 18:22 | 1661608 no life
no life's picture

There was some really low TICK...  especially around 2 pm when it hit -1400.

Mon, 09/12/2011 - 18:18 | 1661610 Kina
Kina's picture

This is Bernanke in the last 30 minutres wanking furiously over his terminal.

 

 

Mon, 09/12/2011 - 18:23 | 1661634 Belarus
Belarus's picture

This is Bernanke in the last 30 minutres wanking furiously over his terminal.

Just thirty minutes a day? I get the reference to the closing levitation which is daily....but he's wanking all day long, that much I know.

Mon, 09/12/2011 - 18:53 | 1661707 TwelfthVulture
TwelfthVulture's picture

I'm going to start using Bernanke as a proper verb.  As in,

"Honey, are you almost done in the bathroom?"

"Give me a minute, I'm bernanking."

Mon, 09/12/2011 - 18:44 | 1661687 Citxmech
Citxmech's picture

The Bernanke = The Phonics Monkey.

Mon, 09/12/2011 - 18:19 | 1661615 youngman
youngman's picture

I too sat in my chair today in disbelief.....what was going on....there are 10 red flags out there and the market closes in the green....strange and very much unreal....it shows the little guys....us by the way...that this market is way beyond rigged...do what you have to do...but beware....this is not a movie with a happy ending...or an oriental massage for that matter...

Mon, 09/12/2011 - 18:40 | 1661675 iNull
iNull's picture

The thought of a hand job from Bernanke...Brrrr.

Mon, 09/12/2011 - 18:59 | 1661724 Soul Train
Soul Train's picture

very short term sma , smoothing two minutes, tells the tale.

all greater fool theory. Lots of shorts covered and whatever longs out there was icing on the cake.

this is insanity investing - take that back, this is like going to the horse races for short term traders.

otherwise, long term investors - real investors, have quite a few great companies out there to buy and reap rewards, whether in fiat currency or some future PM currency. I like the oils - black gold.

Mon, 09/12/2011 - 21:57 | 1662198 Threeggg
Threeggg's picture

Rigged.............? It's OWNED !

Tue, 09/13/2011 - 01:15 | 1662657 Bernankenstein
Bernankenstein's picture

Believe it. Believe in me. Believe in ink and cloth-like paper, or is it paper-like cloth?..the source of all wealth.

Mon, 09/12/2011 - 18:22 | 1661627 MFL8240
MFL8240's picture

Never thought I would live to see the day that the fucking communist Chinese were the bailout group of the world.  While the US is fighting all the wars and ruining its reputaion around the globe returning home with body bags and dismemebered youth, the chinese are picking the bones off the meat and growing their export markets.  Heve no fear though, the US clown is going to produce more goverment jobs using the tax money of you rich folks making $2oo, ooo a year.  Are you fucking kidding? 

Mon, 09/12/2011 - 18:33 | 1661652 wisefool
wisefool's picture

sarcasm: As mentioned in an earlier thread discussing radicals like Ron Paul. Another nut job named Buddy Romer pointed out that it is probably not a good idea to let people lower thier taxable income by deducting business expenses for items manufactured by China. If you dont want to pay taxes, just use the reverse tariff that sends american wealth and tax revenue to our supposed competition and our absolute creditor.

Jeff Immelt does not kid around.

Mon, 09/12/2011 - 19:03 | 1661732 Soul Train
Soul Train's picture

MFL8240, agreed. The days of Mao and his little red book , together with bicycles everywhere are long gone.

Imagine if ever interest rates go back up, - how the fuck are we going to pay the bill ???

Gold, silver and oil. Buy them now.

Mon, 09/12/2011 - 18:26 | 1661639 Racer
Racer's picture

If they keep flushing the evil shorters out.. there will be NO support and this will become an Oct 1987 type event

Chair Satan, keep going ... you are getting there for an Oct 2011 or thereabouts event

Mon, 09/12/2011 - 18:32 | 1661649 Cdad
Cdad's picture

That is exactly the point of such moves...destoying credibility until no one, long or short, plays...and at that time, the market can be obliterated with ease. 

It's coming.  Today's rumor rally should be seen by nervous longs as a completely disasterous thing to have happened.  My guess is...anyone long the market was selling into today's hopium fest.  

Mon, 09/12/2011 - 18:46 | 1661692 Citxmech
Citxmech's picture

Does anyone know how much of the volume at the end of the day was selling?

Mon, 09/12/2011 - 18:28 | 1661642 caerus
caerus's picture

the big move's gonna be a bitch

Mon, 09/12/2011 - 18:30 | 1661647 catladdy
catladdy's picture

HY Long? (High Yield?)

Thanks

Mon, 09/12/2011 - 18:39 | 1661669 Georgesblog
Georgesblog's picture

After keeping up with the news all day long, the best I can say is that riding the currency collapse is exciting.

Mon, 09/12/2011 - 18:41 | 1661678 ZippyDooDah
ZippyDooDah's picture

This is options expiration week.  Volatility games will be played to make options expire without value.  Just saying:  this is in addition to the central planner manipulation.  Let's see what happens by the end of the week.

Mon, 09/12/2011 - 18:46 | 1661691 bogey4
bogey4's picture

Che sorpresa - direct Italian translation.  But not used in Italy as "what a surprise" as well as "quelle surprise" are used idiomatically in English and French and not in Italian.

Mon, 09/12/2011 - 18:56 | 1661714 gjp
gjp's picture

yet another denial party in US markets ... ramping into after hours, tomorrow likely a repeat of Sept 7th 3% moonshot as momos run with it again.

with today's performance MSCI Europe is down around 17% ytd, while US is down only 6%.  US market led by 100x PE bets on the US consumer while Europe is more weighted to industrials, engineering, and utilities and is much more reasonably valued.

Sure Europe is under the gun first, but taken as a whole Europe has more to offer the rest of the world than does the US, which other than bombs, offers the world only its gaping consumer maw.

Europe has got to outperform soon, regardless of whether its on the way up or down.

Mon, 09/12/2011 - 19:22 | 1661778 chump666
chump666's picture

Volatility and bulltraps go hand in hand together.  The credit markets are a basket case, copper still looks like a sell.  Maybe a handful of big players f*cking with each other hence the bulltrap.  China?  Jeez...Paulson played the bubble mania and got played.  So no China rescue, the bubble to end all bubbles is probably ending right now.

Watch Asia on their open. 

Mon, 09/12/2011 - 19:28 | 1661788 Waterfallsparkles
Waterfallsparkles's picture

With most stocks every week is an options expiration.  So, many trade weekly options now.  The stocks always trade around the options prices.  They usually flatline the price during the day between option prices to sell options.  Then at the end of the day whoever buys the most Options wins and the stock goes to that price.

Mon, 09/12/2011 - 19:47 | 1661819 TwelfthVulture
TwelfthVulture's picture

What price would that be?

Because I'm looking at the SPY options that expire this week.  SPY closed at 116 and I have strike prices, in 1-point increments, from 60 to 170.

Or, what about that other myth that 90% of all options lose money?  Options are a zero-sum game.  For every option trade that loses money, the other side of the trade made money.

Mon, 09/12/2011 - 21:36 | 1662150 slewie the pi-rat
slewie the pi-rat's picture

my understanding of "that other myth" is that the "options" don't lose money the buyers do

90% of people who buy options lose money is the myth, imo

Mon, 09/12/2011 - 19:34 | 1661803 prophet
prophet's picture

Now tell me PT is not a TD.

Mon, 09/12/2011 - 19:40 | 1661813 slewie the pi-rat
slewie the pi-rat's picture

tyler~~~earlier today, before the FT/china "correlation" i tried to get your (and otherz') attention abt something i had been watching/seeing for four hours:  the dow futures were down 45-50 points more than the dow, all day long, and i wondered if there could be future "risk on" due to the dow (only 30 stocks, people) futures being possibly oversold.  i don't usually see that kinda divergence, and it wasn't happening in the S&P as far as i cld see

[SD1 replied we shld expect a QEIII call later...]

but that wasn't my point. i was talking about what i tought might be divergence/convergence where the convergence might be a big boost upskie, in the DOW, later, maybe after the nyse closed, but maybe it happened b4.  yes there was a "correlation" to the FT/china story, but that was poo-poo'd by you tyler, and rightly so, i thought.  14 min later, the "effect" of the story (`100 + points?) was over and things headed south, again.  right on!

since then, the market "recovered", the divergence converged back to 25-30 pts diff and now, as i write, is widening, again.  so i re-pose my earlier Q:  could this have been a "spring-loaded" oversold condition in the futures that might have led to the kind of "covering" you allude to here as "weak short covering in the S&P" but could not the impetus to the up-ramp at the close come from the "closing up" the 50-pointer in the DOW?

couldn't this dynamic be at least a part of "what happened"???

Mon, 09/12/2011 - 19:41 | 1661817 stormsailor
stormsailor's picture

the one minute /es kissed the 38.2 fibo at 1164.5 and is headed down.  short 20 with an out at 1166, and at 1149 for a little apache ambush

Mon, 09/12/2011 - 19:43 | 1661824 Homey Da Clown
Homey Da Clown's picture

Back in the old days, there used to be this funny thing called "fundamentals". I forgot what those where now...............

 

published unemployment 9.2%

U6 18% check

Debt to GDP 100% check

GDP growth 1% check

Gold 1900 check

16 trillionin debt check

contracting p/e's check

government spending out of control check

loss of thousands of high paying jobs monthly check

housing market in depression status check

food stamps at all time high check

 

But Obama got dis here Jobs Bill that's gonna solve everything. If we only would listen to him and spend 3 trillion in stimulus, ALL our problems would go away..... oh wait........

Mon, 09/12/2011 - 19:55 | 1661842 Homey Da Clown
Homey Da Clown's picture
S&P Could Fall 20%, 2-Year Treasury Hit 0%: Analyst

 

Well,,, my oh my lookie here

 

Rising risk aversion, a surging U.S. dollar, historical seasonal weakness and a climb in bonds could send the S&P 500 down as much as 21 percent from Friday’s close, according to Mary Ann Bartels, Bank of America Merrill Lynch’s technical research analyst.

 The 2-year Treasury yield could drop to zero, Bartels added.

“There is still a chance that 1100-1020 holds, but the risk is now higher, or a 50 percent probability, that the S&P [.SPX  1162.27    8.04  (+0.7%)    ] tests 985 – 910,” wrote Bartels, who is often chosen among the top chart analysts in an annual survey by "Institutional Investor" magazine. “September historically is the worst performing month in the year, while October traditionally marks important market bottoms.”

 The S&P 500 is already down 15 percent from its bull market high hit at the start of May. Bartels believes that the benchmark will retest the 1100-1020 area and if it fails there, then look out below. She gets her target in the 900s using a combination of commonly-used factors, most notably a 61.8 percent Fibonacci retracement of the March 2009 to May 2011 rally.

The CBOE volatility index [.VIX  38.59    0.07  (+0.18%)   ]—nicknamed “The Fear Gauge”—has jumped 40 percent since the start of August. The CBOE put/call ratio, which measures the total volume of put options versus call options, is jumping as well, signaling investors are buying more and puts to hedge against a fall in equities, points out Bartels, whose gained a reputation for her deep analysis of holdings by hedge funds and speculators.

What’s more, the problems in Europe are causing a flight to safety into the U.S. dollar [.DXY  77.11    -0.09  (-0.11%)   ], which has a very tight inverse correlation with equity markets at this stage. Despite the downgrade of U.S. debt earlier this year by S&P, the dollar still represents the risk off trade.

 

As for bonds, Bartels makes a simple channel around the past highs and lows of the two-year yield. The bottom part of the channel leads right down to zero percent, meaning investors will keep buying these notes and expect nothing in return except their principle. She sees a similar drop in the long-end of the curve with the 10-year Treasury yield going as low as 0.3 percent.

This flattening of yield curve will only hurt banks’ ability to make money on lending over time.

“I fear she is right on point,” said Chris Verrone, a chart analyst for Strategas Research, who correctly got bearish for his clients recently. “The biggest takeaway from me over last few weeks is continued deterioration in credit.”

“If the financials are the ‘tell,’ they are on their way to revisiting the '08 - '09 lows,” said Stephen Weiss, a hedge fund manager for Short Hills Capital. “Europe does bear a scary resemblance to the last U.S. financial crisis and will drive down indices.”

Bartels suggests buying consumer staples, mining stocks and betting against consumer discretionary stocks to protect from the decline and volatility.

“The violent swings within the market are more typical of a bear market than a bull market,” she said.

Mon, 09/12/2011 - 20:51 | 1661995 catladdy
catladdy's picture

The bulls couldn't ask for a more timely release of an S&P downgrade after the bears have been ripped a new aperture today. Sure, one can come up with all the news stories on why the market should go to spy 900 and blame it on PPT & HFT and on how miraculous a 5 std DM could possibly occur the last 30 min of trading.

Now with these articles about reduced SPY targetd released, the bears will be wiring mo money into their accts so they can finance an already loosing trade.

There is no logic on how markets will perform. They will normally do the opposite of what they are supposed to do.

Bears be careful in equities here. The Mother of all Short Squeeze rallies is imminent. The world is not collapsing nor are equities.

Mon, 09/12/2011 - 20:16 | 1661882 chump666
chump666's picture

Chill...

an over-stretched melt-up.  Who cares.  Buy a mini short at the peak and ride down the sell orders that will fill mid week.

The globally economy is total screwed.  And that moron Obama pinning the blame on EZ.  He does some more insanity spending US will get another downgrade.

Tue, 09/13/2011 - 04:58 | 1662131 traditionalfunds
traditionalfunds's picture

another tricky day

Mon, 09/12/2011 - 22:38 | 1662319 msmith
msmith's picture

TNX - 10yr treasury yields continue to drop.  Lower yields ahead.  Forecast here http://bit.ly/nEZHgF

Mon, 09/12/2011 - 23:44 | 1662503 Dingleberry
Dingleberry's picture

Gold up in early Asia, bitchez!!!

Mon, 09/12/2011 - 23:45 | 1662505 msmith
msmith's picture
Silver - bearish price action tests support today. http://bit.ly/mZlpVX
Tue, 09/13/2011 - 02:49 | 1662749 chump666
chump666's picture

China rhetoric filtering through ala Italian bond auction in a couple of hrs.  They (China) sent Spanish yields into hyperspace when they (China) dropped the ball on the CIC verbal nothing a few mths back.

China is turning out to be an utter joke in the markets. 

Tue, 09/13/2011 - 04:55 | 1662829 Bastiat009
Bastiat009's picture

This link will soon have to be added to all financial publications.

http://www.ncpgambling.org/i4a/pages/index.cfm?pageid=1

Tue, 09/13/2011 - 05:55 | 1662858 dcb
dcb's picture

please give me a break, draw the descending trend channel. we hit teh bobbom of that and bounced up. this always happens. give me a break. with ZH, talking about frnt running hft algo's, and how the market diesn't in fact move to data, you'd think they wouldn't try to explain it this way.

Tue, 09/13/2011 - 21:41 | 1665891 moxia19
moxia19's picture

From 1968, the north face sale shop became known as north face brand from a little shop, at that tiem the north face sale store retails high-performance climbing and backpacking equipment.

Tue, 09/13/2011 - 21:47 | 1665922 moxia19
moxia19's picture

Warmly welcome you to my true religion jeans on sale online store to purchase cheap true religion jeans in excellent detail designs.

Tue, 09/13/2011 - 21:49 | 1665947 moxia19
moxia19's picture

Now is the best time of year to buy cheap true religion jeans from true religion outlet shop or true religion sale online store,they are offering the best price for you now.

Do NOT follow this link or you will be banned from the site!